Posted
by
samzenpus
on Monday March 31, 2014 @12:55PM
from the rigged-game dept.

Lasrick (2629253) writes "This NYT adaptation from the book provides an in-depth and infuriating look at how the stock market is rigged. Brad Katsuyama of the Royal Bank of Canada couldn't understand why stock he was trying to buy would suddenly vanish: 'Before RBC acquired this supposed state-of-the-art electronic-trading firm, Katsuyama's computers worked as he expected them to. Suddenly they didn't. It used to be that when his trading screens showed 10,000 shares of Intel offered at $22 a share, it meant that he could buy 10,000 shares of Intel for $22 a share. He had only to push a button. By the spring of 2007, however, when he pushed the button to complete a trade, the offers would vanish.' The ensuing investigation by Katsuyama led him to design a program that actually slowed down the trades. But Katsuyama's investigation revealed so much about how the system is rigged."

They see your trade request and then buy it out from under you on a faster link. By the time you get to the exchange, the stocks are no longer there because somebody "just bought it". But now they are willing to sell it to you at a slightly higher rate.

What you describe is illegal, if you have any evidence of this feel free to forward it to the SEC. Once an order hits the exchange it is on equal footing in regards to being matched with any offers. Some aspects of HFT work by anticipating demand and hitting the exchange before others, this has always been the case since markets were invented.

What you describe is illegal, if you have any evidence of this feel free to forward it to the SEC. Once an order hits the exchange it is on equal footing in regards to being matched with any offers. Some aspects of HFT work by anticipating demand and hitting the exchange before others, this has always been the case since markets were invented.

You didn't read the article did you? This is exactly what they are doing.

I read the article, and I believe you have misunderstood it. When an order enters an exchange, it will be matched with any offers that are already in the system. There is no opportunity to see that order, then run ahead of it to buy shares *on that exchange* and then use them to fill that order. If you offer to buy X at $100, and there are existing offers to sell X at $100, you will be matched with them based on whatever matching rules the exchange uses. There is no legal opportunity for someone to "beat" you to those sell offers and then turn around and try to sell the shares to you at a higher price before your order has a chance to be filled. What the article talks about is working across many different exchanges, which is a different story. i.e. seeing activity on one exchange and anticipating the same activity in a different exchange before you get to it.

I mostly agree with you, although the article does also mention the murkiness surrounding the "dark pools" that banks run your order through first, where they could have the opportunity to trade against you, before forwarding to exchanges. The big exchanges might be vulnerable only to the multi-exchange exploit that is the meat of this article, but the "dark pools" are implied to have their own, different shadiness going on. Sadly, this piece doesn't explore that enough -- possibly because insufficient ligh

I agree that would be an interesting story. Trading against your own customers in the way you describe is illegal, which of course does not mean it cannot happen. or there might be a way to legally achieve the same effect.

Any competent institutional broker has a wide variety of ways to defend its customers against that, all you need is a little time for their algorithms to work. If you don't have time, well, you pay the price just like any motivated seller.

Any competent institutional broker has a wide variety of ways to defend its customers against that, all you need is a little time for their algorithms to work. If you don't have time, well, you pay the price just like any motivated seller.

The problem with dark pools, is that the customers need to be defended from their own broker. These trades happen so fast, and there is so much raw data out there that verifying that the price you got for your stocks was optimal is prohibitively time consuming, so no one double checks that their broker actually got the best price. The high frequency trading takes a very small amount from each trade (0.1% is the amount I saw in the article). Its small enought that it gets lost in thebackground noise of the market, but it is really no difference between this and stealing a penny every time someone withdraws money from an account. Stealing is stealing no matter how you dress it up, or pretend its for the good of "The Market".

High frequency trading is actually good for the small investor and gets them better pricing. What the article is about is the inability of institutional investors to make large trades without moving the market.

Because the mutual fund or index you're invested in is buying and selling all the time. The HFTs are basically taxing every trade. Not just a few tenths of a percent per year... it's per TRADE which is daily. They are reducing the overall profitability of the entire market. Just how badly you'd be affected would relate to how often your funds make trades.

No, you didn't read the article carefully enough (or at all). The order did in fact vanish. The HFT has bids or asks up on all the exchanges. When they see a large order fill on one exchange they front-run the order on all the others (which involves canceling the order on the other exchanges and then taking some other action) before the originators order reaches the other exchanges.

The other point here is that many of these exchanges offer special order types designed to allow HFTs to take advantage of normal investors. For example, orders which either match instantly or auto-cancel if instant execution cannot occur. And many other types beyond the standard market, limit, and split-the-difference orders.

if someone put a Lamborghini on craigslist for $1, and someone else bought it before you, your order didn't vanish... it simply can't be placed. the offer is no longer valid.

And that's also nothing at all like HFT.

It's more like one person has offered a Lamborghini on craigslist for $300,000, another has offered one on autotrader for $310,000 and a third is on eBay for $325,000. You try to buy all three of them for you client, a legally bind racing enthusiast for whom this is a one week supply. The ads have been up for three days already so you send an offer to each of the sellers confident that you can get all three. A response comes back from eBay and you buy that car for $325,000, but someone else who just happened to be watching eBay at the moment you bought it quickly buys the other two cars in the time between your initial buy and the time that your offers arrive at craigslist and autotrader.

While you are wondering what just happened two new Lamborghinis show up on eBay for $325,000 each. You sigh, buy them, and try to think of a nice way to explain to your client that $935,000 in cars just turned into $975,000 in less than a tenth of a second.

The exploit used by high frequency traders isn't the fact that they are able to buy cars before you can, it's that they can spot your orders going into the market and front run on them before they can execute.

Last August the ACM had a whole issue [acm.org] on detailed technical aspects of all parts of trading. I dont recall talk a part on front-trading. But how to shave off yet another few microseconds. Fascinating.

I sure am proud that our country's best and brightest are focusing their efforts on optimization of moving around virtual little green pieces of paper. It's not like we have real problems that need to be addressed.

Curing cancer: being poorly paid until hitting middle age, then almost certainly hitting a career dead end and having to retrain to get coffee for someone who moves little green pieces of paper around.

HFT should be banned, there is nothing these robo-traders contribute to society except for profit for themselves. The argument that they provide for liquidity of the market, or whatever, would not change if everyone would be trading at second scale instead of microsecond scale. My proposal (as someone how knows nothing about stock markets): make it a level playing field and only allow trading at say exact 30 second intervals or so, which should be synced world-wide. In this way, the big firms would only have an advantage over the small guy when new information becomes available in the last half second before the deadline, instead of on every instance of new information. After everyone has placed their orders for the current round, the stock market then takes a few seconds to update all stock prizes, after which everyone has 'infinite time' to compute his action for the next round.

You can't wait that long for your next trade, man. What are you talking about 120 second trading? You have to do it at least every 60 seconds. You can't even break a sweat trading at 120 second intervals!!!!!!!!
(not quite as funny as 6 minute abs).

That sounds good, but what will happen is that the big trading firms will build software to give each other hints as to when they will be buying and selling the the next 30 seconds. There will still be algorithmic trading, it will just have to move toward out of channel cooperation rather than pure speed.

Better yet, how about a tiny tiny tax on each trade? We bitch and moan about deficit this and tax-the-rich that, how about we tax the fuckers who are causing the problem for the behavior that's causing the problem? If financial markets weren't such a short-term crapshoot, and we really DID care about "long-term" capital gains, we wouldn't have the boom-and-bust economy we've been living in.

bingo! mod parent up - damping is what is needed in a lot of socially engineered systems, just as in mechanical systems sometimes damping is required for socally engineered systems to operate effectively - without damping, we get a lot of the problems we see in our society like CEO salaries, or unlimited political donations.... the problem is the people who profit from these out of whack systems fight like hell to make the system even less damped...

Every time I learn more about HFT, I become more convinced that it has to be regulated, and soon. They're only going to get more efficient at extracting money out of these markets without introducing any actual value, and that can't be sustainable in the long run.

Without introducing any value? According to whose opinion, yours? We are very fortunate (in the US at least) that we are not yet entirely enslaved to one person's opinion as to what is valuable. Obviously, the exchanges see value in it or they wouldn't be supporting it.

You ignore that although we do not let just a single person define what is beneficial, we have built our current civilization via the means to discover benefit and disregard harm. It is not the people who decide what's valued, but Humanity as a whole: Nature itself provides the environment which contains the facts of all actions. We need only look through the unbiased lens of reality that our method of science affords. We can come to know what is beneficial or not without guessing, but there are those who

Sounds, from TFA, like IEX already has a working system built by building in delays into their system between making a trade order and its actual execution. The delay is still a few milliseconds, but it's enough for HFT to be pretty much dead as a concept with their clients.

Their problem is that banks are hesitant to give up what was a lucrative source of revenue and use the system, but those same banks are finding it increasingly harder to resist pressure to clean up their acts and do it.

The argument that they provide for liquidity of the market, or whatever, would not change if everyone would be trading at second scale instead of microsecond scale.

Let's even say that high-frequency trading does provide liquidity. From my incomplete understanding of this, all you have are offers on a screen which are withdrawn before anyone can execute on them. It seems more like high-frequency "neener-too-slow" without any actual trades taking place.

HFT should be banned, there is nothing these robo-traders contribute to
society except for profit for themselves.

Exactly! But instead of banning, it should just be taxed. They
are basically imposing a tax on society that makes them filthy rich
while providing no benefit to society. Yet these are the same people
who scream bloody murder whenever someone proposes a bona fide tax on
stock transactions. If they insist on acting like spoiled young
brats then we need to treat them as such.

At its heart, this corruption is similar to the *IAA corruption. In
both cases technological advances that should have made the

I don't think yours or any simple solution will work. The reason is that the markets are largely controlled by people who are interested mostly in exploiting the rules, so they will find ways to do it, because it's a multi-billion dollar industry.

Basically, the casino is being controlled by the cheaters, not the honest gamblers.

Your opinion, fortunately we aren't slaves to one person's opinion as to what is valuable "to society". I am sure all the employees, their families, children, dogs, etc. of the HFTs, producers of all the networking and computing gear they use, the buildings and home they inhabit, the doctors they visit, and so on, might disagree with you about the lack of contribution to society.

Your opinion, fortunately we aren't slaves to one person's opinion as to what is valuable "to society". I am sure all the employees, their families, children, dogs, etc. of the HFTs, producers of all the networking and computing gear they use, the buildings and home they inhabit, the doctors they visit, and so on, might disagree with you about the lack of contribution to society.

That is a bad argument: People making money with organized crime spend money on employees, family and goods too, but that does not make it a good thing. If the HFT people would not be skimming billions of dollars from the market, millions of people might have received 100$ more since their pension fund would have done slightly better, and they would have spent it the same. What did the HFT contribute to society to rip off all those people?

My proposal (as someone how knows nothing about stock markets): make it a level playing field and only allow trading at say exact 30 second intervals or so, which should be synced world-wide. In this way, the big firms would only have an advantage over the small guy when new information becomes available in the last half second before the deadline, instead of on every instance of new information.

It's not a bad idea on its own, but it runs into the laws of physics with all the force of a coyote chasing a roadrunner.

Even if you assume that 90% of that traffic can be removed by dividing trading up into 30 second slices, you're still looking at more than twelve gigabits of market data that need to be somehow blasted out

Why does everyone blame the Republicans for this? They're just tools here.

The Republicans are being controlled by the Fred Birch Society who are in turn controlled by the Fiendish Fluoridators with help from the Boy Sprouts and the Moonies. At the centre of this web lie the Gnomes of Zurich who are well on their way to hoarding a hundred and fifty megabucks and winning the game.

I remember years ago on Sixty Minutes a story about Grace Hopper, who taught computer science. She had a spool of wire one thousand feet long and told students that that was a microsecond. I thought that it was a nice way to illustrate how much time you are wasting when your code takes just one microsecond longer to execute than necessary.

The stock market long ago ceased being about owning pieces companies with companies paying out dividends. It's the same bet that prices are going up that it was in 1929, the HFT's have just figured out how to micro-jack the prices. There is a simple simple fix. Stocks are made non-fungible and you must own for 24 hours before you can trade. This puts pricing back onto a time scale over which the actual productivity or fickle fortunes of a company can change. The economic production of a real company doesn't change on the millisecond time scale.

Nobody trades like this, and nobody traded like this in the early 2000s. That trading style has been obsolete for 20 years, and predates HFT. You don't see something, decide you want that, and then hit Enter or click your mouse button.

In this example, you decide the maximum price you want to pay in advance, and you enter a limit order. If you're selling you decide upon your minimum selling price, and in the same way you enter a limit order. You've locked in your profit, regardless of timing.

If you're setting up some sort of combination, you enter the triggering parameters in advance, and you don't even need to see what was being done on screen.

People say that computers are trading with each other. That is false. That's like saying that Microsoft Word writes documents. Trading companies, their traders, and their programmers write trading software and adjust parameters. 30 years ago, the "software" was held in the traders' minds, and the execution was done via outcry. The underlying mathematics is the same, and traders don't have to hold these calculations in their minds.

The problem here is this. Extremely rich companies can have the fastest links to the exchanges, but this is no different from the olden days where the oldest and richest companies had the smartest and most well-connected traders. The tools of the trade are slightly different, but rich and successful companies will leverage their money to be the most successful, or else they will be replaced by somebody else.

My own background is that I wrote a derivative trading system between 1999-2006 for a tiny company that ultimately didn't make it because we couldn't compete against the big boys. This angst about HFT is largely technophobia. The traders trade, they learn the software, and they often don't understand how it works. To programmers like me, the algorithms are a black box, but the traders do understand the mathematics pretty well. When you have traders coming out against HFT, you have traders who couldn't understand the software or were burned because their companies weren't rich enough.

People who have never worked in this field who are against HFT really don't understand computer-based trading very well, from either a programmer's perspective or a trader's perspective. Keep in mind that the job of a computer is to make mundane things happen more quickly, so we can focus on more human things. You want your 401K to execute as accurately-priced trades as possible. HFT ensures that both styles of trading benefit.

Because nothing you said focused on the problems the article discussed.

One of them was the ability for people to see your trade and then cancel their own order, all before your trade was executed. All made possible because the HFTers were located fiber-optic-distance closer to the exchange servers

Limit orders work fine for small investors, but don't work on high trade situations - you end up ensuring that you get the worst possible price. That is, you only get executed after the price has moved in the wrong direction.

One of them was the ability for people to see your trade and then cancel their own order, all before your trade was executed.

No. The trade was over multiple markets. The HFT trader(s) was hitting all the markets at once, faster than RBC's trade order could get to the slower markets. There is no way to see a trade before it executes otherwise.

Limit orders work fine for small investors - you end up ensuring that you get the worst possible price.

They work fine for those HFT traders too. And because they are limit orders, you don't end up getting burned by a large market move just before your order hits - which actually is a serious problem in the very scenario that the article described.

That is, you only get executed after the price has moved in the wrong direction.

The problem here is this. Extremely rich companies can have the fastest links to the exchanges, but this is no different from the olden days where the oldest and richest companies had the smartest and most well-connected traders.

You couldn't be more wrong.Buying the fastest link is an exploit in the trading system.Having traders (smart or not) is part of the trading system.

People who have never worked in this field who are against HFT really don't understand computer-based trading very well, from either a programmer's perspective or a trader's perspective.

With all due respect, why should we care about "a programmer's perspective or a trader's perspective."

I care about competitive markets.Without competitive markets, it's just more of the shitty behavior we've been trying to eliminate through regulation.Consider that many big trading houses have never lost money.Does that strike you as something that happens in a c

If you're setting up some sort of combination, you enter the triggering parameters in advance, and you don't even need to see what was being done on screen

But I would certainly like to know if the stock was selling for less than my buying price or more than my selling price...or if the price of the stock changed halfway through execution of my carefully planned order which is what is happening here. People who make tons of money doing that see all sorts of benefits from it, everyone else who's not in on the take rightfully considers it a scam.

There seemed to be a lot of silly things you said. I just want to focus on:

You want your 401K to execute as accurately-priced trades as possible.

Except, I really don't. For one thing, I'm selfish and want to buy things for the lowest price and sell them for the highest. For another, I dispute the very concept of an "accurately-priced trade". Or rather, that you can define a trade as being precise down to a cent. I mean, I know that we pragmatically have to define a price-point, but it doesn't seem to

What you are describing isn't insider trading, it has a name called front running. And it's been happening since the market existed. It used to be domain of "market makers" who followed a stock and bought and purchased that stock to provide the market (ie to ensure there is always a buyer and seller). These market makers made a margin on each transaction of anywhere from 10%-0% depending on the number of market makers on that particular stock. The more heavily traded the thinner the margins but even stocks

Frontrunning in the sense of seeing an order before it hits an exchange, and then trading in front of it, is illegal. This could happen in a trading house that also handles large institutional orders, and the in house HFT business could illegally trade against that.

Before you post an anti-HFT screed to Slashdot, ponder the question: Does the speed or frequency of the trading affect whether or not somebody is front running you? If the problem is that someone saw your order and acted on it before it went to execution, then the issue is with the absolute ordering of the events and not with the speed or frequency. There were front runners in the market long before electronic HFT trading came along.

A better term for what you're probably outraged about is flash trading [wikipedia.org].

If the problem is that someone saw your order and acted on it before it went to execution...
I am not sure where you get your information but the above is exactly what front running is. It's taking knowledge of the book of orders and using it as an advantage to middle your way between a buy/sell. Charlie wants to buy from Alice at $1.00. Bob overhears Charlie's intentions, rushes to buy the stock from Alice at $1.00 and then promptly tries to resell it to Charlie for $1.01. That's front running.

I agree on that definition of front running. However, my point was that front running is not synonymous with HFT. I think this is an important point; already the calls are going out to slow down HFT trading in response to the discovery of front running per the original post.

I'm saying it won't help. You could require that all orders get submitted to BATS on post-it notes stuck to the backs of snails, but if someone is looking at the snails before the match engine and biasing the market around the orde

And one thing I've learned is that financial firms generally speaking, don't beat the market. If you look at the S&P 500 as a baseline index for the health of the economy (and it might not be perfect, but it's a good measure), 80% of firms CANNOT beat the S&P in the same timeframe. If the S&P loses, those private firms lose too.

And even if they did... maybe 1-2% over? Which you won't get, because that's what they charge in FEES to manage their funds.

So basically HFT exists, because people still have the idea that investing with Morgan Stanley or somebody is a great idea, and so MS have a huge amount of equity to derive ridiculous profits on for who else -- themselves. Add to that the fees they charge to manage the funds they offer, and the marginal rates of return that investors get well... you know how it goes.

Hopefully my job interviews pending will pan out and I'll get out of finance for good; but sadly the money is what has kept me there, especially with the student loans... yet another benefit from our wonderful financial industry.

Best article on HFT that I've ever read. Explains in fine detail how institutional players get fleeced by high frequency traders. Took a while to read the whole thing, but well worth the time.

One thing to note to all of us retail investors, though... our tiny orders aren't really getting fleeced, and with spreads on most stocks of only $0.01 our trading overheads are miniscule compared to 20 years ago. Standard brokerage fees trump (by several orders of magnitude) HFT losses for people like us.

When HFT firms get a look at the order book prior to the orders being executed and then go out and buy the order book only to turn around and sell it to the original buyer for a penny more......that's front-running. The technology and algorithms are incidental. It's been going on as long as there have been brokers and people buying/selling stock on behalf of other people. The difference this time is that this shit is being encouraged instead of discourage

I'm bit suprised at bad reputation HFT has at Slashdot. In many ways, it is very interesting subject for geeks - how often do you have to care about speed of light and benefits of straight-line microwave link over curvature-of-earth fiber... but most importantly, without HFT, you were able to win the market by either social networking (moving at the border of legalities regarding front running, insider trading etc), sheer amount of money or dumb luck. With HFT, you can win because you have best programmers.

I personally enjoy battle of programmers throwing algorithms against each other a lot more than shady agreements done by cabal of elitist traders agreeing over the phone whom to s***w over today. Maybe because I'm a programmer and I haven't managed to get into cabal of elite traders. I would expect most of Slashdot crowd to be on same side?

Or is it because somebody here had this wrong idea that before HFT a random person actually meant something on the market and was not being abused by Powers and that only after advent of HFT, poor private investors lost possibility to game the market? That 'technical analysis' actually meant more than 'how to win the lottery' systems?

This is war. Computers are rifles. Enemies are other big banks/hedges funds. Money is gunpowder. Stocks are bullets. And people... people are empty cases which get discarded from side of your rifle. And yes, HFT means that machine guns are now in play instead of bolt action rifles, but does it really matter matter to ejected cartridge...

I, for one, feel that the human race has far better things it could be doing with its time instead of obsessing over increasing some numerical values to the detriment of other numerical values.

But then, that's a bit like my (admittedly ill-informed) thoughts on money, sometimes. We invented it, and yet somehow we no longer seem to be in control of it, and it's got us dancing to its tune. Never mind Skynet; what happens when the money markets decide they no longer need us?

I'm bit suprised at bad reputation HFT has at Slashdot. In many ways, it is very interesting subject for geeks - how often do you have to care about speed of light and benefits of straight-line microwave link over curvature-of-earth fiber... but most importantly, without HFT, you were able to win the market by either social networking (moving at the border of legalities regarding front running, insider trading etc), sheer amount of money or dumb luck. With HFT, you can win because you have best programmers.

I personally enjoy battle of programmers throwing algorithms against each other a lot more than shady agreements done by cabal of elitist traders agreeing over the phone whom to s***w over today. Maybe because I'm a programmer and I haven't managed to get into cabal of elite traders. I would expect most of Slashdot crowd to be on same side?

Probably because, with HFT, its not so much about how good your program is, but rather how close you are to the exchange. HFT is more a battle of real estate agents than it is programmers.

I think corps are fucking us by harping on government debt, which has never mattered and is not the crisis they cynically claim it is, when in private they laugh and tell each other "Reagan proved deficits don't matter" and wait till their party gets in so they can run up the debt to new record levels. Because they know it doesn't matter.

First, there is already a mechanism built into the ACA that requires the government to bail out participating insurance companies. So this premise is a given considering that quite a few of the uninsured could already afford some sort of insurance but chose to spend the money elsewhere and such a low penalty doesn't provide a significant incentive to change thst.

Second, a little debt on the national level is good. It is a primary function of bonds and how the government funds certain aspects of itself in em

Ultimately undesirable, perhaps, but I get the impression it's more that economists don't understand some basic laws of reality given how hard they want to push a particular economic model which clearly isn't all they make it out to be.

If debt and deficits don't matter, then the government should send out a million dollars to every citizen. This would ensure there reelection. Why would they not do this since debt does not matter?
If the government did this it would cause massive inflation and all saving would be wiped out. Debt and deficits matter quite significantly, but the real question is how much debt is sustainable. At some point your currency is devalued and you wind up speeding a billion dollars to buy a loaf of bread (a la Zimba

In Zimbabwe, as in Venezuela now, they are exchanging their currency for US dollars, because US dollars are the new gold. The demand for dollars far outweighs the supply, so "massive inflation" is not an issue.

Inflation is psychological, not physical. Just because there is more money, why do you have to raise your prices? It is a choice, and a sociopathic one. It is like the head of Carlin Financial, quoted in the article: “It’s not just enough to fly in first class; I have to know my friends ar

In a case like that, the inflation would help the average citizen and only really hurt the top earners. The money supply would expand by ~350 trillion, but the distribution of that expansion would be very flat, which means the people at the bottom would on average be in better shape then they were.

Think about this: What sets prices? The fact that there is (for example) only 1 hamburger per person created in the US per day. Currently, everyone has $1, and needs 1 hamburger. So the price is $1/hamburger. There is this rich guy, who has $1T, but he still only east 2 hamburgers.

OK, so now every has $1M. The rich guy is still fine, and he still buys his 2 hamburgers. But how many hamburgers can everyone else buy? Hm... there's still only one ha

A few things change. People who have long-term contracts to deliver goods or services at pre-agreed prices (labor contratcs, commodities futures) get screwed as well. Also, the value of debt and savings balances will decrease rapidly. Inflation transfers wealth from lenders to borrowers.

No, that's kind of my point - wealth is destroyed by contracts and savings destruction, but borrowers are not actually helped that much. In the contracts case, the supplier company goes out of business and both parties lose value. In the savers case, the saver loses all savings but the borrowers can't capitalize on the gains because the prices of everything that they care about goes up.

I have noticed an issue on slashdot is that most of the folks here do not seem to understand what defines wealth. Wealth is not money. Wealth is the goods and services that money buys.

Americans are wealthy because they enjoy more goods and services than most of the rest of the world. Europeans are wealthy because they too enjoy more goods and services than most of the rest of the world. It isnt about the quantity of dollars or euros.. its about the quantity of goods and services.

Except that "the rich" tend to have more of their wealth held in hard assets which will inflate in value along with the money supply. It's grandma's life savings that get wiped out when inflation hits.

When the interest on the debt is approaching 50% of the non-defense budget funded from income tax (excluding SS, funded through separate taxes), then I think it is a problem. At some point, it'll be impossible to fund the debt service. Is that the point at which it woul dmatter?

A stock could be acquired and sold in a tiny fraction of a second. Sales tax may be the answer. Think of a company making tens of thousands of trades every day. A healthy sales tax applied to each and every turnover of money could fund our government and maybe allow us to knock off the income taxes. Selling a stock should be no different than selling any other item. the same taxes should apply. We might even see a bank deposit by a customer as also being a sale by the bank and tax it. A withdrawal fro

The HFTs are buying in response to your order. Before you've even bought the good. They pay to get your orders before your orders are even filled.

It's a straight up insider trading contract between the exchanges and the HFTs. The fact that it is carried out over the course of microseconds does not alter the basic dynamics of the scheme, which amounts to the exchanges engaging in insider trading at the expense of their customers.